The background talk from cruise line executives at the Cruise Shipping Miami conference suggested that agents are still an important piece of the distribution network, but pressure will continue to be applied to agents to automate their bookings.
Financial services company UBS has long urged cruise lines to cut their distribution costs, but after meetings with Carnival Corp. executives last week, Robin Farley of UBS acknowledged that commission cuts and more direct sales isn’t the way to do it.
“While reducing distribution expense is an idea that never goes out of style, increasing direct sales and disintermediating the travel agent is an idea that now seems as outdated as bellbottoms. The new black in reducing distribution cost is making travel agent sales more efficient and forcing them to more automated bookings versus a call centre, a significantly more efficient approach to direct sales as well.”
Some executives bluntly said they don’t want agents using costly call centres. They prefer the model of national cruise sellers — do everything online that you can. They say they understand that agents detest commission cuts, but argue that innovations which improve time management in agent/supplier dealings will increase the cruise line profitability and reduce the need for commission cuts.
Five years down the line, executives believe agents will continue to be the primary bookers of cruise product, but the pressure to automate bookings will continue.
“I think you’re seeing travel agents evolve once more,” said one supplier. “There is no doubt they are going to continue to evolve and continue to be the most important part of distribution. The consumer wants an unbiased view of what they should be buying. There are a huge number of consumers that really don’t know all the different cruise propositions that are out there.”